Britain has long been the awkward partner in Europe. In 1951, she refused to join the European Coal and Steel Community, predecessor of the European Community. Ernest Bevin, Foreign Secretary at the time, said of the Coal and Steel Community – ‘If you open that Pandora’s box, you never know what Trojan ‘orses will jump out’. In 1952, Foreign Secretary, Anthony Eden, spoke of ‘frequent suggestions that the United Kingdom should join a federation on the continent of Europe. This is something which we know, in our bones, we cannot do’.
Britain entered the European Community late, in 1973, 15 years after it came into existence, following two earlier failed attempts. She negotiated, together with Denmark, an opt-out from the euro at the Maastricht intergovernmental conference in 1991, and gained numerous other opt-outs in the Lisbon treaty.
Survey evidence has indicated consistent public hostility to further European integration. Since the euro became an issue in the 1990s, not one opinion poll has shown a majority in favour of Britain joining. But the eurosceptic majority in the country is not fully represented in Parliament, where there are pro-European majorities in both houses. Euroscepticism is largely concentrated on the Conservative back-benches in the Commons where it is a growing force. In October 2011, 81 Conservative back-benchers rejected the advice of the Prime Minister and ignored a three-line whip to support an in/out referendum on the EU. This debate was the first to be held under a new e-petition procedure under which any petition attracting 100,000 signatures would be considered by the House of Commons Business Committee for debate.
There is, then, a disconnect between the majority in Parliament and the majority in the country. In the past, however, public hostility to Europe had limited political effects since Europe was not, for most voters, a salient political issue compared with, for example, the health service and the economy. But this may be about to change. In the 2010 general election, the United Kingdom Independence Party won a million votes – 3% of the vote – by far the highest ever in Britain for any non-established party; in 2009 it had come second in the elections for the European Parliament behind the Conservatives but ahead of Labour and the Liberal Democrats. Survey evidence indicates that its support is growing, particularly in the south east, and it stands to perform well in the next elections for the European Parliament in 2014, the year before the general election.
In December 2011, EU leaders proposed a treaty amendment to strengthen the fiscal rules of the European Union and formalise the rules for the bail-out of member states in economic difficulty. The President of the European Council, Herman van Rompuy, with the agreement of the vast majority of the member states proposed to achieve this by amending Protocol 12 of the treaties since this would not require parliamentary ratification in any member state except for Britain where, thanks to the European Union Act of 2011, parliamentary ratification would be needed. But, had a new treaty being submitted to Parliament, Conservative back-benchers would undoubtedly have pressed for a referendum on the proposals.
This no doubt was part of the reason for David Cameron’s ‘veto’. He refused to accept amendment of the Protocol unless Britain’s proposals on the regulation of financial services were met ‘in full’. These proposals would have had the effect of ending qualified majority voting on matters relating to financial services. Other member states pointed out that there would be a clause in the proposed treaty that no actions by the eurozone would be allowed to undermine the single market, and no discussion of single market matters would take place in eurozone bodies. But the British government maintained its ‘veto’.
David Cameron’s actions elicited considerable parliamentary and public approval in Britain. But they did not amount to a `veto’ in the sense that they could prevent the changes required by the majority of European Union members. For the 17 eurozone members decided to enact a separate treaty of their own. There had been some talk before the `veto’ that, if this happened, Britain could lead an outer grouping of the non-eurozone members. But the member states not in the eurozone form a heterogeneous grouping. Many of them – particularly those from Central and Eastern Europe – hope to join the eurozone in the future. Indeed all of the new member states that have joined the EU since 2004 are legally required to join. In the event, 8 non-eurozone members – excluding only Britain and the Czech Republic – decided to participate in the new treaty.
Since December 2011, a series of shadow eurozone institutions parallel to EU institutions have been developing – a Euro summit parallel to meetings of the European Council, a Eurogroup of finance ministers parallel to Ecofin, and a Euro Working Group parallel to COREPER. Tony Blair and Gordon Brown, concerned at the prospect of a two-speed Europe, insisted on attending Euro summits. But Britain cannot now attend any of these eurozone institutions.
Two further developments emphasise Britain’s isolation from Europe. The first is that George Osborne has agreed to increase Britain’s contribution to the IMF so as to finance bailouts for eurozone members in difficulties. Second, budget negotiations are due to begin this year. The budget has traditionally been a highly divisive issue ever since Britain joined the European Community in 1973, becoming its second largest net contributor after Germany. In 1984, at Fontainebleau, Margaret Thatcher secured a permanent rebate amounting to 66% of the gap between Britain’s share of contributions and receipts based on spending allocated to member states. In 2005, Tony Blair accepted a modification so that Britain would pay her share of the costs of enlargement of the EU. In return he secured the promise of a budget review. But the bulk of EU funds are spent on the Common Agricultural Policy and structural funds for regional development and vested national interests are likely to block reform even though France, once the main beneficiary of the CAP, has now become, for the first time, a net contributor to it. The Commission is now weaker than it was when Roy Jenkins or Jacques Delors were its presidents, and almost certainly too weak to broker an agreement over the opposition of the vested interests of member states.
These developments are likely further to isolate Britain from the European mainstream. But the European Union is at a turning point. Isolation will matter only if the eurozone crisis is successfully resolved and the EU moves further forward towards some form of fiscal unity. If the eurozone crisis recurs, still more if one or more member states leave the euro or if the eurozone breaks up, isolation may come to be seen as an advantage.
Even so, there are likely to be domestic political consequences. Conservative MPs, many of whom face reselection as a result of radical boundary changes to constituencies, are pressed by a eurosceptic public and by the threat from UKIP. Conservative back-bench pressure for an in/out referendum on Europe will, therefore, probably revive. Were the Conservatives to win an overall majority in the next general election, due in 2015, these pressures would be difficult for the leadership to resist.
Europe has always been a deeply divisive issue in British politics precisely because it raises fundamental issues of national identity. In the 1970s, it split the Labour Party, leading, in 1981, to a new if short-lived breakaway party, the SDP. In the 1990s, the Conservatives were split by the Maastricht treaty, and the attempt to ratify it almost destroyed John Major’s government. Europe could easily prove as divisive in the future as it has been in the past.